On Wednesday, the new Chancellor of the Exchequer, Philip Hammond, delivered his first Autumn Statement, and the first major fiscal statement since the Brexit vote in June.
His first task was to report that economic growth would slow over the next two years, and that there would be an increase in public borrowing from targets originally set out in March, and that returning the Budget to an annual surplus would not happen until sometime after 2021.
There were relatively few new proposed changes to the tax system, although the Chancellor confirmed his commitment to introducing new rules on the taxation of Non-Doms – UK residents whose permanent homes are outside the UK – to continuing to stamp out tax avoidance and the introduction of swingeing penalties for tax evaders, especially those with undisclosed funds held offshore.
Aside from these measures, the Chancellor did announce some changes which will benefit businesses and individuals, some of which are highlighted below:
- The rate of corporation tax will, as previously announced, decrease to 19% in April 2017, falling to 17% from April 2020
- Rural rate relief will increase from 50% to 100% for businesses operating in rural areas with a population of less than 3,000, where that business is the only shop, post office, pub or petrol station
- The VAT flat rate scheme will be changed from April next year with the introduction of a new 16.5% rate for certain businesses which operate with limited costs
- The government has pledged to spend up to £1 billion on improving broadband and 5G network coverage, and £1.32 billion on improving roads and public transport
- The Chancellor confirmed that personal allowances would increase to £11,000 from 2017, and confirmed his commitment to increasing the allowance to £12,500 by 2020
- The National Living Wage and National Minimum Wage levels will again increase from April 2017
- The rate at which Universal Credits are withdrawn, once an individual’s income exceeds the earnings threshold, will be decreased
- The amount that savers can invest into ISAs will increase to £20,000 per annum
- The Chancellor has pledged to ban the charging of letting fees to tenants, and will shortly publish a consultation document on how this will be implemented
If you have any queries or would like to find out more about these measures please contact James Duggan or Peter Langridge, at Simmons Gainsford, on 01825 746 888.
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